This study probes Hebrew-speaking children‘s knowledge about vowel representation by diacritics and by vowel letters in emergent literacy stages, and how this knowledge changes with formal instruction in first grade. Sixteen kindergartners and sixteen first graders were administered two reading tasks, two meta-linguistic explanation tasks, and two writing tasks involving vowels in different phonological and orthographic constructions and morphological roles. The results show that kindergartners already have some knowledge about writing consonants, and proceed to meaningful reading and writing in first grade through learning about writing vowels. Reading and writing syllables were easier than word reading and writing in kindergarten, and converged in first grade. Explaining vowel differences in words was better than in syllables, since children made use of the lexical context. Learning to represent morphemes at word final position by vowel letters emerged gradually in kindergarten, in the following order: H, standing for a and e, then W and Y, representing o, u and i. The development of vowel letters is shown to be dependent on a variety of considerations - orthographic, morphological, phonological, and perceptual. These results are discussed in the context of general theories about the consolidation of spelling.